Money Management: 10 Tips for Building a Savings Account

Saving money isn’t easy to do, especially if you don’t even have a savings account but it’s an important thing to do, right? If you currently have no money saved, don’t feel bad – you’re not alone.

Approximately 34% of American adults have no money saved at all, and another 35% have only $1,000 or less in a savings account.

Living without any money in savings is not a good idea though. After all, you’ll want to retire someday. So, you should start working on building a savings account now.

It might not be easy at first but it’ll definitely be worth it. It will take discipline and intention but it can also be exciting too. As you watch your money grow, you’ll likely be motivated to make it grow even faster and soon you’ll be finding all kinds of ways to save more money.

Does this sound good to you? If so, let me help you learn some of the best ways to start saving money and building your account.

  1. Research Savings Account Options and Set One Up

Saving money is a lot easier to do if you have an account designated for this purpose alone. So, you’ll need to open a savings account but before you can do that, you’ll have to find the right option.

Researching your options is a great place to begin, and one important thing to know is the difference between an FDIC-insured account and one that’s not.

An account that is FDIC-insured is one with virtually no risk. You can’t lose your money if you choose this option; however, you might not make as much money from the interest.

An account that is not FDIC-insured is one that invests your deposits in the stock market or other types of non-insured derivatives. You are taking risks if you invest in an account like this because there’s no insurance.

The benefit of an account that is not insured is that you could make more money on interest and growth. If you want to play it safe, choose one that is insured and compare interest rates offered by different banks.

If you want to stay organized while you search for an account to open, you could take a Mac screenshot of each account you are interested in. When you’re finished researching, view your screenshots and choose an account.

  1. Start Small

One good mindset to have as you get started is to start small. Don’t think you need thousands of dollars to open an account because you don’t. You might be able to open one with just $20 if that’s all you have.

You should aim to start the account with as much as possible but the point is that starting small is better than not starting at all. If you only have $20 right now that you can use, that’s plenty to get your account started.

Some banks require larger opening deposits than this while others have no minimum requirement rules, so find a bank that works with the amount you have to start with.

  1. View Your Deposits as Expenses in Your Budget

If you currently do not have a savings account, there’s a good chance you probably don’t have a budget either. Let me just tell you, it will be harder to save money if you don’t have a budget. Therefore, you need to make one.

Creating a budget is not that hard to do. Just take out a piece of paper and write down your monthly income at the top. Next, list each expense you have every month, including fixed and variable expenses and add them up.

Finally, subtract the expense total from your income to find out how much you have leftover. This leftover money is what you can use for your savings account and for other purposes.

If you want to start saving money, you should decide how much you want to save each month and write it in your budget as if it’s a regular expense.

By viewing your savings deposits as expenses, you’ll get in the mindset that you have to save this money each month instead of deciding only to save it if you feel like it.

  1. Set Up Automatic Payments

Now that you have a plan to save a certain amount of money each month, you should set it up on automatic payments. You probably pay your mortgage payments this way, and you might even pay a lot of other expenses like this too.

Setting it up on automatic payments gives you less of a chance that you’ll skip putting money in your account each month. In other words, it offers a great method of prioritizing your habit of saving money.

Using this system makes it easier to save too. You won’t have to do a thing. It will happen on its own once you get it going.

  1. Cut Your Monthly Expenses

Now that you understand the basics of getting a savings account started, it’s time to dig into ways to save even more money.

Suppose you decide to start saving $100 a month. That’s a great start that will help you save $1,200 in just one year. Imagine, though, if you could find a way to save even more money than that.

One popular way to save money is by finding ways to cut monthly expenses and then saving that amount of money.

Your cable TV is a great place to start. How much are spending on this bill each month? $50 maybe, or even $100? Imagine cutting this out or reducing it by half. If you can do this, you could save another $25 to $100 every month.

Insurance is another good one to evaluate. If you obtain quotes from other companies, you might find a deal by switching carriers. If you could save even $30 a month on this, it could be an extra $30 to pocket away each month.

  1. Save Your Raises or Get a Part-Time Gig

When you’re living on a budget, you get used to living on a certain amount of money. So, if you get a raise at your job or take on a part-time gig of some kind, you’d have more money coming into your budget.

If you’re making it just fine on your current income, you could save all the extra money you are now receiving from your raise or part-time job.

  1. Purge and Consider the Minimalist Lifestyle

The minimalist lifestyle is one that is becoming more popular today and basically involves living in a very simple way. People living like this get rid of things they don’t need and keep only what they need to have.

I’m not telling you to give up everything you own but I am saying that living more like this could help you save more money. Here are a couple of practical ways to use this lifestyle to help you save money:

  • Sell things you aren’t using or don’t need and save the money you receive from the sales
  • Don’t buy new things unless they are practical and absolutely necessary
  • Plan out every purchase you make to avoid buying things that really aren’t important or essential

Just applying those few tips could help you cut back on your spending which could free up more money for your savings account.

  1. Give Something Up

It can also be helpful to keep a list of everything you spend money on for an entire month to find ways to cut back. For example, do you stop for a donut and coffee each morning? If so, how much do you spend a day?

If this daily stop costs you $5, you could save $30 a week if you normally stop five mornings a week. Add this up and you’ll see that you’re spending over $1,500 a year on coffee and donuts! That’s a lot of money!

  1. Save Your Pocket Change

Saving your pocket change is also a great way to add to your savings account. If you can throw all your pocket change into a jar, you could cash it in after a few months and deposit the proceeds in your account.

If you want even more to cash in with your change, throw all your $1 bills in there too and watch it add up.

  1. Challenge Yourself to a No-Spending Week

One last thing you could try is a no-spending challenge. Could you go an entire week without spending any money? Well, probably not, but you likely could go an entire week without spending much money if you tried.

This is just a fun challenge to consider that could possibly help you grow your savings account even faster.

Don’t Procrastinate: Begin Building a Savings Account Today!

Building a savings account now will protect your finances later on in life. If you start now, imagine how much money you could have waiting for you in 20 or 30 years.

Do you yearn for financial freedom? Are you ready to start living a more frugal life so you can accomplish this?

If so, check out our blog for more articles to help you learn how to go from frugal to free! 

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